Smooth muscle cells (SMCs) contribute to proper vascular function but also to atherosclerosis. Little is known of the mechanisms mediating SMC cholesterol distribution. Serum amyloid A (SAA) accumulates in atherosclerotic plaques by deposition from plasma lipoproteins and/or local synthesis. We showed that SAA 1) is synthesized by SMCs in response to IL-1ct, 2) induces trafficking of cholesterol to the endoplasmic reticulum (ER), 3) down-regulates cholesterol and fatty acid synthesis and 4) decreases accumulation of cholesterol and phospholipid. Furthermore, SAA-mediated cholesterol trafficking decreases lipid synthesis by decreasing nuclear accumulation of the transcription factor known as sterol response element binding protein-1 (SREBP). Moreover, SAA down-regulates expression of the known SREBP-regulated gene acetyl CoA carboxylase. Interestingly, unlike other agents that traffic cholesterol to the ER, SAA mediates this effect without an exogenous cholesterol source, suggesting a novel mechanism of redirecting endogenous cholesterol pools. Our gene microarray analysis showed that SAA induces expression of secretory phospholipase A2 (sPLA2) and calcium-dependent cytosolic phospholipase A2 (cPLA2). Moreover, we show that SAA dramatically increases expression of sPLA2 protein. Additionally, CCAAT/enhancer binding protein (C/EBP) family members, known to up-regulate sPLA2 gene transcription, are up-regulated by SAA. Additional data suggest a role for cAMP response element-binding protein (CREB) in activation of C/EBP expression. Lastly, sphingomyelin, which has been shown to inhibit sPLA2 activity, inhibits the SAA- mediated movement of cholesterol to the ER. Thus, we hypothesize that SAA activates CREB, which up- regulates expression of C/EBPs, which in turn up-regulate expression of the sPLA2 gene. We further hypothesize that sPLA2 activity causes hydrolysis of membrane phospholipids, generating fatty acids that activate sphingomyelinase, contributing to endogenous cholesterol trafficking and hence down-regulation of genes activated by SREBP. Our aims are to 1) determine the role of lipid-free and lipid-associated SAA on sPLA2 gene expression via CREB activation and C/EBP expression 2) establish the effect of lipid-free and lipid-associated SAA on a) sPLA2 vs. cPLA2 expression and activity and b) to determine the role of phospholipase gene activation on sphingomyelinase activity and 3) establish the effect of lipid-free and lipid- associated SAA-mediated phospholipase activation on cholesterol trafficking, nuclear availability and function of SREBP. Cardiovascular disease remains a major public health concern. Elucidation of mechanisms that promote disease vs. protect against it will lead to future strategies for drug development.